m a n a g e m e n t 2e H i t t / B l a c k / P o r t e r Chapter 12: Communication and Negotiation These slides were developed using Microsoft Office 2003 but can be shown on newer versions of MS Office. To print the notes section for class lectures, select “file/print,” and under “print what,” select “notes pages.” If you prefer black-and-white printing, select either “pure black and white” or “color” under “color/grayscale.” If you select grayscale, the slide will be difficult to read.

Learning Objectives After studying this chapter, you should be able to: Explain why communication is vital for effective management Describe the basic process of communication Discuss how to choose the best mode and the appropriate media richness for effective communication Analyze the impact of the organizational context on communication

Learning Objectives Identify key barriers to effective communication Explain various approaches to overcoming communication barriers, including intercultural barriers Describe the basic process of negotiation

Basic Model of Communication Communication: the process of transferring information, meaning, and understanding from sender to receiver Encoding Medium Decoding Noise Communication involves transferring information, meaning, and understanding from the sender to the receiver. The next slide provides a visual to illustrate how communication works. Encoding is the act of constructing a message Medium is the mode or form of transmission of a message Decoding is the act of interpreting a message Noise is potential interference with the transmission or decoding of a message

Basic Model of Communication Noise: Can interfere at any point Sender Encodes message chooses a medium (channel) Sends the message Receiver Receives message Decodes message May send feedback for clarification The basic model of communication is universal, no matter what the culture. The process works like this: The sender originates the message by encoding it, or constructing the message, or the content of the communication. The sender then transmits the message through a medium. A medium is the method or means of transmission, not the message itself. The receiver acquires, or receives, the message by hearing it, reading it, or having it appear on a fax or computer. The receiver then begins decoding the message, that is, interpreting it. Sometimes distractions interfere with the message; these interferences are called noise. Noise contributes to misinterpretations of the original message, and it is only through feedback, or verification of the original message, that communication problems can be uncovered and corrected. Adapted from Exhibit 12.1

Modes of Communication VERBAL MODE (Language used to convey meaning) NONVERBAL MODE ORAL WRITTEN NONVERBAL Examples Conversation Speeches Telephone calls Videoconferences Letters Memos Reports E-mail Fax Dress Speech intonation Gestures Facial expressions Advantages Vivid Stimulating Commands attention Difficult to ignore Flexible Adaptive Decreased misinterpretation Precise Effectiveness of communication increases with congruence to oral presentation Emphasize meaning Disadvantages Transitory Subject to misinterpretation Precision translation loss Inflexible Easier to ignore Meanings of nonverbal communication not universal Communication can occur in either a verbal mode or a nonverbal mode. The verbal mode uses language – or words – convey meaning. The verbal mode consists of both oral and written communication. (Note: Most people mistakenly think that “verbal” communication is spoken, but in fact, it includes anything that involves words, including written communication.) The slide shows examples of both oral and written communication, along with advantages and disadvantages of using that mode. The nonverbal mode involves communication that does not use words. Nonverbal includes a large variety of modes, including gestures, facial expressions, body language, etc. Advantages and disadvantages are highlighted in the slide. Adapted from Exhibit 12.2

Media of Communication Different media have different characteristics (media richness) Personal-impersonal nature Speed in sending and receiving Availability of multiple cues Opportunity to receive immediate and continuing feedback from the receiver Message should be matched to best medium The media of communication are the means of communication, or how information is transmitted from sender to receiver. These are sometimes called channels of communication. Different media have different sets of characteristics, known as media richness. [Media richness is discussed in more detail on the next slide.] Media can be personal or impersonal, fast or slow, provide multiple or few cues, or provide an opportunity to receive immediate and continuing feedback from the receiver.

Factors in Media Richness Rich Media Personal Multiple cues to aid in decoding Immediate feedback Lean Media Impersonal Few cues to aid in decoding Delayed feedback Different media are classified as rich, or lean, based on their “capacity to facilitate shared meaning.” Rich media provide several types of information and multiple ways to obtain mutual understanding between sender and receiver. Thus, face-to-face communication would be considered a rich medium. Lean media are more impersonal the allow delayed feedback. E-mails or memos sent to a large distribution list would be good examples of lean media, as they are intended to convey information to large audiences with little intent of feedback. Media like the telephone would be in the middles, as most phone conversations are between two people and allow for some feedback but don’t allow for much nonverbal cues. Examples: Rich Lean Face to face Telephone E-mails, memos Adapted from Exhibit 12.3

Organizational Context of Communication Organizational characteristics that affect communication: Composed of individuals and groups Oriented toward goals Differentiated functions Intended coordination Continuity through time There are several characteristics of organizations that can affect communication, as summarized in the slide.

Directions of Communication Lateral communication Supervisor Supervisor UPWARD COMMUNICATION Information, questions, suggestions, problems, requests for clarification DOWNWARD COMMUNICATION Goals, objectives, directions, decisions, feedback The directions of communication within organizations can be classified according to the level for which they it is intended: Downward communication: messages sent from higher organizational levels to lower levels. As the slide shows, the supervisor communicates with subordinates and may discuss goals, objectives, directions, etc. An example would be a marketing vice president (supervisor) communicating with a marketing assistant. Upward communication: messages sent from lower organizational levels to higher levels. Subordinates communicate with supervisors by providing information and suggestions or asking questions. An example is the marketing assistant communicating with the marketing vice president. Lateral communication: messages sent across essentially equivalent levels of an organization. People at the same level, even across multiple departments, communicate all kinds of information, including providing information or asking for help. Examples are the marketing assistant asking for help from a chemist in research and development (R&D) or the marketing vice president asking the R&D vice president for some product research information. Subordinate Subordinate LATERAL COMMUNICATION Information, (formal or informal) for joint problem solving Adapted from Exhibit 12.4

Channels of Communication FORMAL CHANNELS Specify individuals responsible for tasks Specify individuals responsible for communicating information above and below them Indicate persons to whom work-related messages should be sent INFORMAL CHANNELS Tend to operate laterally more than vertically Move information quite rapidly Carry both work-related and nonwork information Organizational channels of communication can be either formal or informal. Formal channels are authorized, planned, and regulated by the organization and that are directly connected to its official structure. Informal channels are not pre-specified by the organization but that develop through the interpersonal activities of employees. The next slide illustrates how formal and informal channels may flow.

Channels of Communication FORMAL channels of communication INFORMAL channels of communication CEO Vice President of Marketing Manager Toy Manufacturing Formal channels of communication (illustrated by the solid lines) are generally dictated by the organizational structure. Thus, employees generally speak to their direct supervisors or to direct subordinates or to people in their own departments. Informal channels of communication occur between employees outside the realm of the formal channels. Mostly they occur laterally – at the same levels - such as communication among the advertising and promotions managers with the supervisors of board games and electronic games testing. But they can occur at different levels as well. The CEO may be particularly interested in an important project in electronic games testing and may communicate directly with the supervisor of this without necessarily going through the supervisor’s boss. Advertising Manager Promotions Manager Supervisor Board Games Testing Supervisor Electronic Games Testing Adapted from Exhibit 12.5

Patterns of Organizational Communication FORMAL CHANNELS Authorized, planned, and regulated by the organization Reflect the organization’s formal structure Define who has responsibility for information dissemination and indicate the proper recipients of work-related information May be modified by the organization Minor to severe consequences for ignoring them INFORMAL CHANNELS Develop through interpersonal activities of organization members Not specified by the organization May be short-lived or long-lasting Are more often lateral than vertical Information flow can be very fast Used for both work-related and nonwork information This slide summarizes the patterns of organizational communication between formal and informal channels. Adapted from Exhibit 12.6

Example of Communication Networks Salt Lake City New York Boss San Diego New York Managers Denver Divisional Marketing Manager, Los Angeles Seattle Chicago, Retired former colleague Communication networks are identifiable patterns of communication that occur with some regularity within and between organizations, whether using formal or informal channels. This slide shows how a middle‑level divisional marketing manager in Los Angeles might have a particular network that involves her boss in New York, three key managers in other departments in the company’s New York headquarters, her seven subordinates located in major Western cities, and two outside vendors of market research data. Another network for the same manager might involve two lower‑level managers in other units in the firm’s Los Angeles office and their former colleague and old friend who is now a sales supervisor in Chicago and who has access to inside information on how well new marketing approaches are working in that region. Irvine Marketing Researchers Portland San Francisco Los Angeles Subordinates Network 1 Network 2 Adapted from Exhibit 12.7

Barriers to Communication Level Origin of barrier Affects communication between: Inter- personal Selective perception Frame of reference Individual differences Emotion Language Nonverbal cues Individuals or groups Organi- zational Hierarchical Functional Individuals and/or groups within an organization Individuals and/or groups in different organizations Cultural High/low-context culture Stereotyping Ethnocentrism Cultural distance Individuals or groups in different organizations with different national cultures Individuals or groups from different organizational cultures Individuals or groups form diverse cultural backgrounds Barriers that interfere with the communication process can arise from several different sources, including interpersonal, organizational, and cultural sources. Interpersonal barriers can occur with either the sender or the receiver. One of the key causes of this barrier is selective perception, the process of screening out some parts of an intended message because they contradict our beliefs or desires. Individuals also have different frames of reference, existing sets of attitudes that provide quick ways of interpreting complex messages. Organizational barriers can interfere with communication between individuals or group within the same organization, between individuals or groups from two different organization, or between entire organizations. Cultural barriers may occur between culture and communication are intertwined because human communication only occurs within a cultural context . (Cultural context will be discussed in more detail on the next slide.) Adapted from Exhibit 12.7

Communication Differences in High and Low Context Cultures HIGH-CONTEXT CULTURES More adjustments in messages Rank of receiver affects message and medium Nonverbal communication cues may be very important Medium may be as important as message LOW-CONTEXT CULTURES Fewer and smaller adjustments in messages Rank or receiver may or may not affect message or medium Nonverbal communication cues not as important Message is more important than medium [Note: Cultural context was discussed in chapter 3, but students may need a quick review of what each means and how it relates to communication.]

Communication Differences in High- and Low-Context Cultures Japan China Italy Germany South Korea Saudi Arabia France Australia Canada USA Vietnam New Zealand This slide shows where various national cultures fall on the cultural context scale. Countries such as Japan, South Korea, China, Vietnam, and Saudi Arabia are high-context cultures, which means that they tend to pay great attention to the situational factors surrounding the communication process and as a consequence substantially alter what they say and how they say it based on the context. Countries such as the U.S., Canada, Australia, Germany, and New Zealand are low-context cultures, which means that they tend to pay less attention to the context and so make fewer and smaller adjustments from situation to situation. High-Context Cultures Low-Context Cultures Adapted from Exhibit 12.9

Cross-Cultural Barriers ETHNOCENTRISM The belief in the superiority and importance of one’s own group STEREOTYPING The tendency to oversimplify and generalize out groups of people Three additional concepts discussed in the section on cultural barriers were ethnocentrism, stereotyping and cultural differences. In our growing global business world, these barriers become increasingly important. Ethnocentrism is the belief in the superiority of one's own group and the related tendency to view others in terms of the values of one's own group. Ethnocentrism leads individuals to divide their interpersonal worlds into in‑groups and out‑groups. Stereotyping is the tendency to oversimplify and generalize about groups of people. The more firmly held the stereotype by a communicator, the harder it becomes for the person to overcome preconceived expectations and focus on the specifics of the message being sent or received. Cultural distance refers to the overall difference between two cultures' basic characteristics such as their language, level of economic development, and entrenched traditions and customs. CULTURAL DISTANCE Difference between two cultures’ basic characteristics such as language, economic development, and traditions and customs

Improving Listening Skills Listen rather than talking yourself Be more open-minded Develop empathy Listen actively Observe nonverbal cues The barriers to communication can be overcome by having good listening skills. This means that managers should: Listen rather than talking yourself: concentrate on what the other person is saying and say nothing. Be more open-minded: develop a greater awareness of your personal tendencies with regard to these barrier Develop empathy: is identify with and understand the other person's feelings, situation, and motives. Listen actively: make eye contact to help speakers feel comfortable and convinced that you are sincerely interested in understanding what they have to say. Observe nonverbal cues: such as eye movements, facial expressions, and body language.

Improving Sending Skills Simplify the language Organize your writing Understand the audience Besides listening, managers can improve their sending skills by simplifying the language they use, organizing their writing to make the message clear and logical, and understanding the audience.

Overcoming Cross-Cultural Communication Barriers Study general principles that apply to all types of intercultural communication Learn about the fundamental characteristics of the other cultures with which you will be working For high-context cultures, learn as many details in advance about the target organization(s) and their specific individual representatives For high-context cultures, use at least a few words or phrases in the listener’s language For high-context cultures, be especially careful about body language and tone of voice For low-context cultures, organize written communications so that the major points are immediately and directly stated Study and respect communicators’ preference for greater degrees of formality, especially compared with the typical American approach of casual informality This slide provides a comprehensive list of tips for overcoming cross-cultural communication barriers. Adapted from Exhibit 12.10

Improving Communication: Organizational Level Gatekeepers are at the communication interface between separate organizations or different units. They: Increase formal communication Replace face-to-face communication with electronic communication Develop networks Create centralized office to manage communication activities The basic means for improving communication at the organization level is the use of gatekeepers. The slide summarizes what gatekeepers do.

Communication and Negotiation Process of conferring to arrive at an agreement between different parties, each with their own interests and preferences Two negotiation activities Day-to-day activities of the managers organizational unit Part of a formally appointed negotiating team representing unit or organization Negotiation the process of conferring to arrive at an agreement between two parties, each with their own interests and preferences. The purpose of negotiation is to see whether the two parties can arrive at an agreement that serves their mutual interests. There are two types of negotiation activities, as summarized in the slide.

Achieving Effective Negotiations Less effective More effective Positions People Involved Maintaining/ Increasing Competition (Win/Lose Focus) Interests Problem/Issue Decreasing/ Lessening Competition (Collaborative Focus) There are several ways managers can increasing their chances of achieving successful negotiation outcomes. Negotiators should focus on the two parties’ interests, not their positions. Interests are a party’s concerns and desires – what they want, in other words. Positions, on the other hand, are a party’s stance regarding those interests. Adapted from Exhibit 12.11

Key Factors in Cross-National Negotiations People Listening skills Orientation toward people High self-esteem Influence in the home organization There are three key factors in cross-cultural negotiations: people, the situation and the negotiating process. This slide focuses on the important of the people; the situation is discussed in a later slide. There are several universal traits that successful cross-cultural negotiators have; these are listed in the slide. However, there are also some traits that would characterize a good negotiator and that are different, depending on the culture. These are highlighted on the next slide.

Important Characteristics Needed by Negotiators U.S. Managers Japanese Taiwanese Managers Brazilian Managers Preparation and planning skill Thinking under pressure Judgment and intelligence Verbal expressiveness Product knowledge Ability to perceive and exploit power Integrity Dedication to job Ability to win respect and confidence Listening skill Broad perspective Persistence and determination Interesting Competitiveness As the table in the slide indicates, characteristics of good negotiators can differ from culture to culture. Compare and contrast these traits and allow students to discuss what drives these traits. Adapted from Exhibit 12.12

Key Factors in Cross-National Negotiations (cont.) Situation Location Physical arrangements Emphasis on speed and time Composition of the negotiating teams Negotiation process In additional to people, the situation is a key factor in cross-cultural negotiations. Three variables determine the outcomes of the negotiation: The location: It’s commonly thought that negotiating on your home turf is advantageous. Physical arrangements: Americans tend to have different teams facing each other in negotiations. This is a competitive approach, but other approaches might be better for other cultures. Emphasis on speed and time: Americans like to get down to business quickly and efficiently, while other cultures want to get to know you before they can trust you. Composition of the negotiating teams: The inclusion or exclusion of key authority figures may impact the negotiation process. Finally, the negotiating process is a key factor in cross-cultural negotiations. The process is detailed in the next several slides.

Stages in the Negotiation Process Planning and preparation Advance planning and analysis Background research Gathering of relevant information Planning of strategies and tactics Setting objectives Predetermining possible concessions There are five stages in the negotiation process. [Each stage is detailed on this and following slides.] STAGE 1 Planning and Preparation Adapted from Exhibit 12.13

Stages in the Negotiation Process Relationship building between negotiation parties Developing trust Developing personal rapport Establishing long-term association STAGE 2 Relationship Building Between Negotiating Parties STAGE 1 Planning and Preparation Adapted from Exhibit 12.13

Stages in the Negotiation Process Information exchange Learning about the needs and demands of the other set of negotiators Acquiring and exchanging other information STAGE 3 Information Exchange STAGE 2 Relationship Building Between Negotiating Parties STAGE 1 Planning and Preparation Adapted from Exhibit 12.13

Stages in the Negotiation Process Persuasion attempts American managers treat as the most important stage Mixture of approaches Assertive and straightforward Warnings or threats Calculated delays STAGE 4 Persuasion Attempts STAGE 3 Information Exchange STAGE 2 Relationship Building Between Negotiating Parties STAGE 1 Planning and Preparation Adapted from Exhibit 12.13

Stages in the Negotiation Process Concessions/Agreement Permit each party to take away something of value American managers tend to have less leeway for concessions Some use normative appeals such as “it’s your obligation” STAGE 5 Concessions and Agreement STAGE 4 Persuasion Attempts STAGE 3 Information Exchange STAGE 2 Relationship Building Between Negotiating Parties STAGE 1 Planning and Preparation Adapted from Exhibit 12.13